A recent trial involving Swift and Societe Generale's SG-FORGE has successfully demonstrated the settlement of tokenised bonds using both fiat currency and stablecoins. This development brings Swift closer to its objective of acting as a neutral coordination layer between traditional financial systems and emerging blockchain-based technologies, at a time when the tokenisation of capital markets is rapidly accelerating.
The key outcomes of the trial include:
- •Swift and Societe Generale's SG-FORGE completed a trial that settled tokenised bonds using both fiat currency and stablecoins.
- •The transaction incorporated SG-FORGE’s Markets in Crypto-Assets (MiCA)-compliant EURCV stablecoin, alongside Swift's existing infrastructure.
- •Core bond lifecycle events, such as issuance, settlement, coupon payments, and redemption, were managed across both blockchain and traditional systems within a single, coordinated workflow.
- •This trial supports Swift's overarching strategy to develop a shared, blockchain-based ledger for cross-border payments and digital assets.
Swift and Societe Generale Test Tokenised Bond Settlement
The successful test was conducted in close collaboration with SG-FORGE, the digital asset division of Societe Generale. By utilising SG-FORGE's euro-denominated stablecoin, EURCV, the participants were able to exchange and settle tokenised bonds, while simultaneously supporting payments in both traditional fiat currency and digital formats.
The EURCV stablecoin is specifically designed to adhere to Europe's Markets in Crypto-Assets regulation. It offers native compatibility with Swift's network, which facilitates the coordination of transactions across various blockchain platforms and established payment systems.
Familiar Market Roles, New Technology
Several prominent European banks participated in the trial, carrying out their standard capital markets functions. Institutions such as BNP Paribas Securities Services and Intesa Sanpaolo served as paying agents and custodians, demonstrating that tokenised bonds can be effectively managed using established institutional roles and processes.
The trial comprehensively covered crucial bond lifecycle events. These included the initial issuance of bonds, delivery-versus-payment settlement, the distribution of coupon payments, and the final redemption of the bonds, all of which were managed as part of a unified and coordinated process.
Interoperability Instead of Replacement
The trial deliberately positioned blockchain infrastructure not as a replacement for Swift, but rather as a complementary technology within a collaborative model. Swift took the lead in orchestrating the transaction, leveraging its existing messaging standards, such as ISO 20022, while the blockchain components operated discreetly in the background.
This integrated approach allows banking institutions to benefit from accelerated and more automated settlement processes without the necessity of directly engaging with blockchain protocols or undertaking extensive overhauls of their internal systems. This significantly reduces both operational and compliance-related risks.
According to Thomas Dugauquier, the trial effectively illustrates how interoperability can facilitate the scaling of digital assets within regulated markets. This is achieved by preserving trusted existing workflows while simultaneously introducing novel technological advancements.
Part of a Broader Digital Asset Strategy
This collaboration with SG-FORGE is a significant component of Swift's wider initiative involving a series of digital asset and digital currency pilot programs. These extensive trials have encompassed tokenised securities, the settlement of mixed fiat and digital currencies, and blockchain-based messaging, involving numerous banks and public institutions.
With many of these pilot programs now successfully concluded, Swift is actively preparing to integrate a blockchain-based shared ledger into its existing infrastructure. This ledger, developed in partnership with over 30 banks globally, will initially focus on enabling real-time, 24/7 cross-border payments, with plans to expand its capabilities to encompass other digital asset use cases in the future.
Setting Standards for Scale
In parallel with its technical development efforts, Swift has submitted proposed market practice guidelines to the Securities Market Practice Group. The primary objective of these guidelines is to facilitate the integration of digital assets into current capital markets processes without jeopardising financial stability or increasing the complexity of onboarding for participants.
As the trend of tokenisation continues to expand across various asset classes, including bonds, equities, and other real-world assets, fragmentation across different blockchains remains a significant challenge. Swift's ongoing work with Societe Generale and other leading financial institutions positions the network as a critical connector, bridging emerging digital ecosystems with the established global financial system.